Beyond Meat ((BYND)) has held its Q4 earnings call. Read on for the main highlights of the call.
Beyond Meat’s latest earnings call revealed a cautiously optimistic sentiment, marked by positive signs of recovery. The company reported consecutive quarters of revenue growth and significant cost reductions, alongside international expansion efforts. However, challenges persist, including an overall decline in annual revenue and difficulties in certain segments, compounded by the suspension of operations in China. Efforts to improve gross margin and reduce operating expenses are ongoing, reflecting a mixed but hopeful outlook.
Return to Revenue Growth
Beyond Meat has signaled a positive turnaround with two consecutive quarters of year-over-year net revenue growth. This marks a significant recovery after more than two years of declining sales, suggesting that the company’s strategic initiatives are beginning to bear fruit.
Significant Reduction in Operating Expenses
The company achieved a notable reduction in operating expenses, cutting over $50 million in 2024, excluding a $7.5 million settlement. This contributed to a nearly $100 million year-over-year improvement in adjusted EBITDA, highlighting effective cost management strategies.
International Expansion
Beyond Meat’s international growth is evident with the launch of Veggie McPlant Nuggets at over 1,500 McDonald’s in France and the expansion of Beyond Steak in French retail. These efforts underscore the company’s commitment to expanding its footprint in European markets.
Improved Gross Margin and COGS
The company reported an improved gross margin of 13.1% in Q4 2024, with a decrease in COGS per pound to $3.91, marking the best result since Q2 2021. This improvement reflects ongoing efforts to enhance operational efficiency.
Ongoing Revenue Decline
Despite recent growth, Beyond Meat’s overall net revenues for 2024 were $326.5 million, down 4.9% from 2023. This indicates a slower recovery in revenue compared to previous years, posing a challenge for sustained growth.
Challenges in U.S. and International Foodservice
The company faced challenges in its U.S. and international foodservice segments, with U.S. foodservice net revenues decreasing by 2.1% in Q4 2024 and international retail net revenues decreasing by 1.7%. These declines reflect ongoing difficulties in these markets.
Suspension of Operations in China
As part of cost-cutting measures, Beyond Meat decided to suspend operational activities in China. This move impacts the company’s international presence but aligns with its strategy to streamline operations and focus on profitability.
Unfavorable Foreign Exchange Impact
Unfavorable changes in foreign currency exchange rates negatively affected net revenue per pound and gross profit, adding to the challenges faced by the company in maintaining its financial performance.
Forward-Looking Guidance
Looking ahead, Beyond Meat provided guidance for fiscal year 2025, focusing on achieving EBITDA positive operations by the end of 2026. The company aims for net revenues between $320 million and $335 million, with a gross margin target of approximately 20%. Operating expenses are expected to range from $160 million to $180 million, with capital expenditures projected at $15 million to $20 million. Strategic decisions, such as suspending operations in China and reducing workforce, are intended to streamline operations and focus on long-term profitability.
In summary, Beyond Meat’s earnings call reflects a cautiously optimistic outlook, with positive signs of recovery tempered by ongoing challenges. The company’s efforts to return to revenue growth, reduce costs, and expand internationally are promising, but the path to sustained profitability remains complex. Investors will be watching closely as Beyond Meat navigates these challenges and pursues its strategic goals.